Nucor Porter's Five Forces
1. Customer Bargaining Power: There has been an increase in competition in the steel sector, especially in the United States. Therefore, the options of buyers are steadily increasing. Since the product differentiation in this industry is low, the switching costs are also low. Therefore, the competitive force coming from customer bargaining power is very strong.
Supplier Bargaining Power: There is a scarce amount of raw materials for steel in this industry and there are very few suppliers for them. Most of the materials are imported into the United States. Therefore, the competitive force coming from supplier bargaining power is moderate to weak.
Potential New Entrants: Again, there is low access to the raw materials needed for this industry. …show more content…
The prospects for future profitability of US Steelmakers are becoming less attractive. Customers are now choosing to buy imported steel due to the cheaper prices. The assets that Nucor built or acquired when the last economic recession took place generated a huge portion of their profits. It was noted how well they took advantage of economics recessions in order to grow more solid and powerful. Nucor should also consider expanding this type of industry environment and build more plants, but it should be done cautiously. They should consider merging with others both inside the US and outside. This way they could expand production capacity and possibly expand their market presence all over the world.
4. The main strategy that Nucor has followed and employed is a low-cost leadership strategy. They have definitely achieved a sustainable competitive advantage over its steel industry rivals by building inexpensive plants and operating them very efficiently. A competitive advantage that that Nucor enjoy is that they are very cost competitive and have a low-cost advantage compared to its rivals. They are able to compete successfully with foreign steelmakers who are attempting to sell their steel to customers in the United States for a lower
Supplier Bargaining Power: There is a scarce amount of raw materials for steel in this industry and there are very few suppliers for them. Most of the materials are imported into the United States. Therefore, the competitive force coming from supplier bargaining power is moderate to weak.
Potential New Entrants: Again, there is low access to the raw materials needed for this industry. …show more content…
The prospects for future profitability of US Steelmakers are becoming less attractive. Customers are now choosing to buy imported steel due to the cheaper prices. The assets that Nucor built or acquired when the last economic recession took place generated a huge portion of their profits. It was noted how well they took advantage of economics recessions in order to grow more solid and powerful. Nucor should also consider expanding this type of industry environment and build more plants, but it should be done cautiously. They should consider merging with others both inside the US and outside. This way they could expand production capacity and possibly expand their market presence all over the world.
4. The main strategy that Nucor has followed and employed is a low-cost leadership strategy. They have definitely achieved a sustainable competitive advantage over its steel industry rivals by building inexpensive plants and operating them very efficiently. A competitive advantage that that Nucor enjoy is that they are very cost competitive and have a low-cost advantage compared to its rivals. They are able to compete successfully with foreign steelmakers who are attempting to sell their steel to customers in the United States for a lower